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Canadian Mint, Vending Industry Seek Coordination

by Richard Giedroyc

When in 1987 the aureate-nickel composition Loon dollar coin was introduced in Canada the Royal Canadian Mint sent sample prototype coins to the vending machine industry in advance of the release of the actual coin planned for circulation. Through this preplanning the industry was be able to calibrate coin receptacles in advance of the new coin release.What was sent to the industry were pseudo-coins on which the word test appeared, but were the same weight, diameter, and metal composition as are the Loon dollar coins that followed. Since that time Canada has introduced a ringed bimetal $2 coin, changed the composition of the 1-cent coin, and is now changing its cotton-paper fiber bank notes to a polymer or plastic composition.Each of these changes impacts all coin and bank note receptacles, be they used for counting purposes, or if they are meant to accept physical currency to vend a product or a service. Every time there is a change in a currency it costs the vending machine industry money to re-calibrate its machines. It may cost the vending machine industry in other countries money as well since coins of a new metal weight and composition from one country may work in a machine somewhere else in the world as an unplanned byproduct. An example of this is the Japanese 10-sen coin that during the 1990s was accepted in lieu of a US quarter in road toll machines in New York.Canada’s latest high tech changes will make their $1 and $2 circulating coins lighter. Some of the other coins the mint is now producing will glow in the dark, although it is unlikely this novelty will impact the vending machine industry. “Paper” bank notes are being phased out in favor of those made of significantly more durable polymer. In addition Canada is looking towards cyberspace where it hopes to introduce what it calls MintChip, where monetary value can be passed from one source to another electronically.

All these changes may be necessary as Canada looks to the future of its money, but it is keeping the vending machine industry busy re-inventing the wheel so to speak.The April 14 issue of the Winnipeg Free Press newspaper quoted Winnipeg’s Gourmet Coffee Service Manager Ralph Burokas as saying, “Ever since the Toonie [Canada $2 coin] came out, coin acceptance mechanisms have been designed to read the metal content of the coins. Now, every time they change the metal content of the coin, the mechanism does not read it.”Gourmet Coffee owner Tevor Westwood was not as charitable, adding: “It’s a time issue as much as a cost, but absolutely it’s a pain in the neck for us.”Westwood continued, “We’ve come to accept it rather than worry or fret about it. It’s something we can’t control. It’s obviously a government decision so we’ll deal with it and move on.”It can be a costly pain in the neck for those in the vending machine industry. Gourmet Coffee has about 200 machines that will require being recalibrated. Canadian Automatic Merchandising Association Past President Kim Lockie has about 1,200 machines in Fort McMurray. It will cost him about $15,000 to recalibrate these machines, or about $12.50 per machine mechanism. Burokas estimated it will cost Gourmet Coffee Service as high as $100 per machine.Lockie said, “It’s not something we want to do, but it’s not an option. The good thing is we work with the mint and they give us enough leeway to be able to get our machines done to accept the coins. They are going to make the change, so we might as well partner with them.”Canada’s latest $1 and $2 coins use the same multi-ply plated steel technology as is already being used in lower denomination Canadian coins. Since these $1 and $2 coins are already entering circulation alongside older versions made of a different metal composition this becomes a challenge for vending machine operators. The circulating $1 coin was introduced in 1987, while the ringed bimetal $2 coin was introduced in 1996. Each was welcomed by the vending industry since the industry could now offer products more conveniently at these increased values.The 2012 Canada $1 and $2 coins each has a steel core plated with alternating layers of copper, nickel, and brass. The patented technique used by the RCM is more cost effective and uses less metal than do traditional coin alloy compositions.The plating thickness of each coin layer also allows for greater flexibility in controlling the electromagnetic signatures on each coin. Further security is provided on the new 2012 $1 and $2 coins by having added a laser mark micro-engraving appearing on the reverse of each denomination. The $2 coin also displays a virtual image and has edge lettering.

Other nations employing the RCM to manufacturer their coins are now reportedly soliciting the mint regarding adopting some of these innovations to their coins as well. The RCM is, of course, looking to save money on production costs while issuing what it hopes will be a consumer-friendly product. RCM spokesman Alex Reeves said, “The electromagnetic signal can be better manipulated on that type of coin,” speaking of the added security the new coins will provide.The other shoe is about to drop as well, as far as the vending industry is concerned. Polymer or plastic bank notes are on the way. Canada will begin by introducing notes in $50 and $100 denominations, than follow it up with notes in denominations of $5, $10, and $20 by the end of 2013. It is these lower denomination notes that are more likely to be vended, however all of the notes will need to be accepted by Automatic Teller Machines at banking centers as well – yet another industry that will be impacted by a Canadian government cost-cutting effort.

All these changes are within Canada’s Economic Action Plan 2012, which hopes to save significant amounts of money through these changes. The elimination of the cent alone should save the Canadian government an estimated $11 million annually.No information was available at the time this article was being written regarding any recall of the older coins or bank notes. Unfortunately what the RCM may save in costs are being passed on to the vending machine industry, who in turn may pass these costs on to consumers by raising what they charge to vend a product or service. Technology changes may be exciting, but they come with a price tag.